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TSLA Trade Setup & Entry

TSLA (Tesla Motors Inc) was brought to my attention in the trading room by @snipertrader (thanks!). I like this setup enough that I'm going to add it as as both a Short Trade Setup as well as a Active Short Trade here at current levels (221.00). The ideal entry range on this short trade is from 226 down to 211. As I'm spending the morning catching up replies to questions from the trading room & emails, I just wanted to get this trade idea out asap and I will follow up with the suggested targets & stops asap. Stops will be on a daily close somewhat above the daily downtrend line & you can see a couple of my near-term target levels on this 60-minute chart. Again, exact suggested targets & stop-loss levels will follow.

 

As with any trade, this one may or may not work out. However, I think the R/R on a short entry here is very attractive as the downside risk if stopped out is minimal compared to the gain potential, should the stock reverse soon. I will also add that IF (still a big IF) we are in the early stages of a new bear market, stocks that become overbought in a primary downtrend, such as TSLA is with a reading over 71 on the daily RSI, usually reverse very shortly after reaching overbought levels followed by a sharp leg down, just as oversold stocks in a primary uptrend (bull market) often experience powerful & lasting reversals following oversold readings (RSI 30 or below).

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Mar 17, 2016 10:35am|Categories: Completed Trades - Short|Tags: |3 Comments

3 Comments

  1. snp March 17, 2016 10:57 am at 10:57 am

    I have a 3rd hit TL and 200dma pierce at about 230. I am taking the TL from the july and sept wicks

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  2. snipertrader March 17, 2016 12:48 pm at 12:48 pm

    Thanks Randy for the response and good to see your analysis lines up with mine and your vote of confidence in the setup.

    Just FYI, for anyone interested in this short setup. Keep in mind the following which is probably one of the reasons aiding TSLA’s levitation upwards still and may ( on optimism ) continue to remain stable up here at these levels as it might attempt to reach even incrementally higher within it’s current shorting target zone due to their upcoming event ( also remember that their Model 3 is much delayed and much hyped but still it seems quite far off into the future – relatively speaking ). Just trying to keep folks aware at least a bit of the fundamental sentiment backdrop here as the bulls continue to assert themselves.

    http://finance.yahoo.com/news/teslas-big-model-3-reveal-040359467.html

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    • andresnunes March 17, 2016 3:20 pm at 3:20 pm

      Might close above the down trend line, getting too crazy getting around the 200ma, if these bulls don’t stop there the gap fill might be in works next few days around 239.

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